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boxingcardmanwe have a government entity called CIGA that guarantees insurance against issuer failure, paid for by a levy on each policy written by an admitted insurer. A surplus lines insurer does not participate in CIGA; if it goes belly up, you lose the coverage. However, a strong insurer is a relatively good bet not to go belly up, so a surplus lines insurer is not always a bad thing. It allows for coverage that might not otherwise be available and not at a reasonable price.
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